Saturday, October 8, 2011

Debunking The Myth Of The Wealthy Job Creator

Back in July, I think, Avedon Carol pointed me to Thom Hartmann and a great discussion of the myth of the wealthy job creator.

The conservatives keep reciting--to me, reminiscent of the mob of zombies chanting "Imhotep" in the first Mummy movie--that tax cuts for the wealthy are the best way to create jobs and stimulate the economy.In fact, I think they actually believe it.

But it makes no sense.The cart is not only before the horse, there seems to be no horse.Let's try this for some logic:

The way jobs are created is through demand for goods and services.I need my car worked on, so I take it to a garage.If enough additional people like that particular garage, eventually the owner will need to hire another mechanic to meet the increased demand.Merely giving more money to the owner via tax cuts--in the absence of increased demand--will not cause him suddenly to say "Aha!Now I can hire that mechanic!" The new mechanic will be sitting on his hands because the cars are not lining up outside. Why? People in a fiscal crunch are doing more of their own auto maintenance or deferring it.

Nope, it's D-E-M-A-N-D, in the form of spendable money in people's pockets, that will create jobs. It's always been a bottom-driven process, never a top-down, trickle-down effect, despite all the lockstep chanting.

1 comment:

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